In nearly all the public speaking engagements that I attend and almost every one-to-one interaction I have with young, energetic corporate executives, the one common question I am invariably asked is this -- What does it take to become a successful entrepreneur?
While there is really no formulaic answer to this very loaded question, after having written three books on this subject I felt compelled to elucidate my view of what are the five key ingredients that are needed to cook the winning entrepreneurial soup.
It might be helpful for aspiring and new entrepreneurs to take a look at these glow-signs as they embark upon the heroic quest of becoming an entrepreneur.
Persist. Persist. Persist.
If you have read this first point and internalised it, you have gathered 90 per cent of entrepreneurial gyaan already.
Persistence is the name of the game. Period.
It took Elon Musk a few blown rockets before he refused to quit and became a billionaire.
Jeff Bezos famously delivered books in his own car and it is heard that the fabulous Bansal duo of Flipkart stood outside bookstores of Bangalore and distributed pamphlets.
So, be very clear -- if there is any one parameter that defines entrepreneurial success or failure -- it is persistence.
You will run out of money.
Your key team members will leave you in the middle of nowhere and move on for greener pastures (or so they would believe then!).
Your tech will turn out faulty.
Your potential customers will refuse to use your product.
VC investors will not even acknowledge your emails, and even your family will begin to question you very seriously.
Yes, it is important to be prudent about business realities and never leave the side of caution.
But a bull-headed, single-minded commitment towards the goal is, in my opinion, the single most critical success factor. And it is an unmissable common trait among all brilliant entrepreneurs.
Build a business for customers, not investors.
If you are good, investors will find you. For my first company Magnon, we never approached any investor.
We focused on acquiring and retaining customers, on building a strong and sustainable company and on creating knowledge and people capital.
It took a decade, but by 2011 we had some of the worlds largest Fortune 500 companies chasing us to get a piece of the pie.
A lot of young entrepreneurs I meet have one frenzied goal -- to find an investor.
Unknowingly, they are working towards creating visible attraction for investors and not for customers.
If you ask them to be candid, a majority of them have not even thought their business model through and have no visibility of breaking-even or turning profitable.
Their first and ultimate goal seems to be to raise money, and this is recipe for failure.
Investment chases great businesses, and not the other way around.
The team with the best players wins.
Simple. A start-up entrepreneur who was pitching to me for angel investment, made a statement that shut my mind to his business idea once and for all.
He said, I am a one-man army.
No doubt he was talented. He was from two of the finest engineering and management institutions of the country. And yet, I refused to take the investment discussion forward.
The reason is simple -- businesses are built by teams.
Yes, we hear of one big founder-name once a company becomes successful.
But you will note that every successful entrepreneur does not tire of thanking his or her team at every given opportunity.
And that it because just the way a General cannot win a war singlehandedly, a start-up entrepreneur cannot be a one-man-army.
So, before you try to find a customer or an investor, find your marketing co-founder, or your technology co-founder...build that winning team around you.
Investment for scale, not survival.
Most business plans I receive nowadays are such that their very existence and upkeep would depend on heavy investment.
Probably because of the glittering stories of some companies raising impossible sounding rounds of money hitting headlines every now and then, dreamy-eyed entrepreneurs start chasing the investment dream instead of the self-sustainability and profit dream.
A very smart young executive once approached me with a start-up idea in the healthcare space.
He pitched the idea hard, without realising that he had no prototype, no proof-of-concept, and the business he was proposing involved such high cost-burn that even two or three years of survival would require enormous amounts of money.
And profits were nowhere visible...not even on a five or seven-year horizon.
Now that is a poor approach, unless you have a world-transforming idea based on extraordinary tech-innovation.
But most start-ups dont have that and would therefore benefit from asking -- Even if we do not get an investor, how long will it take us to generate the first dollar of profit?
The answer to this question will answer many hard yet important questions.
Be the last man standing.
Many aspiring entrepreneurs undermine the importance of longevity.
Building start-ups is a Rahul Dravid innings, not a Shahid (Boom Boom!) Afridi one.
Building a winning company needs time -- time for innovation, time for mistakes, for corrective measures, for adaptability, for superior technology, for organisation-building, for brand-equity and a lot more.
Several well-funded yet failed companies of the past have been those that burnt away their funds at break-neck speeds, as if in a race to raise the next round.
Some start-ups that attracted astronomical rounds of funding failed miserably because they fell in the funding-spending-valuation-next-round cycle instead of a funding-building-learning-consolidating path.
So, irrespective of whether you are boot-strapping or are externally funded, staying in the game longer increases your chances of success manifold.
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